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How neoliberalism hides its true face

Ian Sinclair talks to academic JOEL BAKAN about his new book on corporate power and asks whether multinational giants have really changed and what concerned citizens can do to resist capital’s assault on democracy

Academic and author Joel Bakan
Academic and author Joel Bakan

PUBLISHED in 2004 alongside the 2003 film documentary of the same name, Joel Bakan’s The Corporation: The Pathological Pursuit of Profit and Power was a timely and influential critique of the central institution of contemporary capitalism.

Bakan, professor of law at the University of British Columbia in Canada, has now published a sequel — The New Corporation: How ‘Good’ Corporations Are Bad For Democracy. 

And, true to form, he has also co-directed a documentary based on his new book. 

In your 2004 book and 2003 documentary you argued corporations, as institutions, are imbued with the character traits of a human psychopath. What is the central argument of your new book? 

Shortly after that book and film were released, companies began making sweeping commitments to social and environmental good. 

One hundred per cent carbon neutrality, zero waste to landfills, 100 per cent recycling, moves to renewables, proclamations about inequality and climate change, cascades of corporate programmes designed to help people in need and promote sustainability — all promises signalling that companies were now part of the solution, no longer the problem. 

It was as though they were saying: “We’re not psychopaths anymore; we’re good actors now, caring and conscientious,” a clear rebuttal to my earlier charge. 

I felt I needed to answer that — not least because these ideas would soon define big business’s overarching ethos, and also bring everyone else, including many progressive people, under their spell. This project is my answer.

I argue that the apparent turn to good — the “new corporation movement,” as I describe it — is animated by corporations’ discovery of something human psychopaths have known all along: a sheen of charm works better than overt skulduggery. 

Commitments by companies to social responsibility and sustainability, along with pious claims to be conscientious and caring, create a sheen that, in turn, hides their legally imbued self-interested character. 

It’s not that that character necessarily bars companies from doing good. But it does limit the kinds of good they can do to what will help them do well — a profound limit — while also requiring they do bad when that, rather than doing good, is the best way to do well. 

No-one in business denies any of this. None say social and environmental values should trump financial ones. 

Rather, what they say is that companies should, when possible, leverage the former to serve the latter. Hardly a road to the New Jerusalem.

Can you give a couple of examples of how these “new” corporations act in contradiction to their socially conscious public rhetoric? 

Here are some examples from the book. British Petroleum’s criminal negligence leading to the Deepwater Horizon disaster is juxtaposed to the company’s green branding. 

Volkswagen’s emissions scandal is compared to its reputation as an environmental leader while the scandal was unfolding but hidden. 

Honeywell’s boast that its manufacturing plants are super-sustainable is set against the company’s weapon-making, including nuclear weapons, inside those sustainable plants. 

British American Tobacco’s claim its tobacco fields are biodiverse is set against its use of those fields to make a product that kills people and makes them ill. 

Google’s vaunted use of renewable energy is compared to the fact it helps fossil fuel companies boost production with its artificial intelligence. 

And fossil fuel companies’ commitments to the Paris climate accord are contrasted to their intensive lobbying to ensure it imposed few real constraints on them, and contained no mandatory enforcement mechanisms.  

What these and other stories show is that while it is true corporations pursue social and environmental goals, and sometimes do some good, they necessarily pursue those goals within limits created by the legal imperative to serve self-interest. 

And those limits — in marked contrast to the limitless possibilities for goodness conjured by corporate marketing and public relations campaigns — are, as noted, profound.

What do you mean by the book’s subtitle “How ‘good’ corporations are bad for democracy”? 

Many, including some on the left, acknowledge the kinds of corporate deceptions and limits I talk about. But they say in response: “Isn’t it at least better than nothing that corporations try to do some good, and sometimes succeed?” My answer is “no.” It’s worse than nothing. 

And that’s because the notion that corporations can be good actors, along with the entire new corporation movement it animates, is part of a worrying ideological trope. 

It suggests that, because corporations are good now, we should welcome, not resist, their increasing power, impunity, and control over society; we should trust them to regulate themselves, to run our schools and water systems, to partner with democratic governments, rather than be subject to their sovereignty. 

That is why the new corporation’s charm offensive is not just deceptive, but dangerous. 

It puts a smiling face on all of neoliberalism, not only on the corporations operating within it.

This all became clear to me during a visit to the 2018 World Economic Forum in Davos (which plays a central role in the book and film). 

There I spoke with many new corporation leaders, none more candid than Richard Edelman, one of the world’s top business gurus. 

Corporations have become “good actors,” he told me, “agents of change” ready to “fill a void” left by retreating governments. 

“I’m not much of a believer in political citizenship,” he continued. 

“I actually believe much more in the power of the marketplace.” 

I found chilling this casual dismissal of “political citizenship” (in other words, democracy) in favour of markets — and all the more so for reflecting (as was confirmed during my further wanderings around Davos) a core belief among new corporation advocates, the supposed “good guys” of capitalism, that because corporations are now publicly minded, ready to take the lead on social and environmental issues, governments can, and should, retreat from doing the same. 

Which helps explain how new corporations can both celebrate social and environmental values while, at the same time, lobbying vociferously against governments’ efforts to protect those very values through regulation and programmes designed to foster equality, justice and the public good.  

In terms of how concerned citizens should respond to corporate power, you argue “protest is not enough.” What do you propose? 

My book and film end on a note of hope, showing how people around the world are working and fighting for deeper ideals of democracy, of justice, of planetary survival — sometimes with and through governments, other times against and outside of them. 

The Black Lives Matter protests, uprisings against autocratic rule in eastern Europe, climate protests by schoolchildren, indigenous struggles against colonialism, experiments in participatory democracy — these are some of the stories I feature, and that give me hope. 

I also argue that though the pandemic has exacerbated existing inequalities and injustices (a dynamic I explore throughout the book), there are some signs of hope in how, at least to some extent, people’s responses to it exhibit counter-neoliberal sensibilities of humanism and the importance of collective endeavour.

But you’re quite right, I also argue protest is not enough, while insisting it is often necessary. 

Because corporations are created and enabled by government and the state, as are the market systems they ply for profit, I argue, challenging their power and impunity must happen from within state institutions as well as from outside. 

I feature in the book and film progressive movements that have sought this kind of political presence within the state, and show how their work is aimed not only at getting a place within existing democratic institutions, but also, once there, deepening the democratic character of those institutions. 

The latter aim, I argue, requires at a minimum bringing the social into democracy. 

Political democracy cannot exist in any real way without a foundation of social equality and justice. 

It’s the growing separation between these two realms, the social and political, that now threatens democracy so profoundly. 

That (along with many other things) needs to change, and there are signs — which I point to in my book and film — that it just might.

The New Corporation: How ‘Good’ Corporations Are Bad For Democracy is published by Vintage. The New Corporation: The Unfortunately Necessary Sequel documentary is playing at the Human Rights Watch Film Festival from March 18-26 on Barbican Cinema On Demand.

Joel Bakan and co-director Jennifer Abbott will take part in a Live Zoom ScreenTalk about their film on Sunday March 21 at 5pm. Buy tickets here: ff.hrw.org/london.

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